Template revised September 22, 2016 COMMISSION AGENDA MEMORANDUM Item No. CTION ITEM April 11 , 2017 Amount of this request: Total estimated project cost: ,000 ACTION REQUESTED EXECUTIVE SUMMARY COMMISSION AGENDA Action Item No. Page of ��Template revised September 22, 2016 ; format updates October 19, DETAILS Port staff has begun assessing stormwater infrastructure an d is expected to be completed in 2020. Assessments can be significantly delayed to clean pipes. The vac truck will be deployed to clean the stormwater line to allow for system assessment. The assessments will provide key data to aid Port staff in ident ifying and prioritiz ing rehabilitation of the storm water system. Reassessments will be performed on a regular interval after 2020 based on initial findings. For 2017, the Port is renting a vac uum truck exclusively for Utility work at a significant cost. The Port currently owns one vacuum truck that support the Stormwater Pollution Prevention Plan ( SWPPP and emergency work. The existing truck is fully utilized and therefore not available for the work in question . Furthermore, t he truck is 10 years old an d at the end of its expected useful life. Maintenance costs for this unit continue to escalate and associated downtime affects scheduling and productivity. Additionally, Utility needs require a dedicated truck. Scope of Work The scope of work for the pr oject is to procure the truck to aid in the assessment, clean ing and rehabilitation of storm water infrastructure. Schedule Port staff is currently working on a delivery schedule of the truck . It is expected to be operational during the 4 quarter of 2017. ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 Continue to rent vac uum truck on an annual basis. Cost Im plications: $147,823 for 2017, expected to increase in future years at a rate of 3.5% for a total cost of $1,942,689 over 0 years (the expected life of purchasing a new vac truck Pros (1) No separate maintenance fees. (2) Costs can be allocated directly to maintenance or capital projects. Cons (1) High cost. N et resent alue (NPV) of $1,384,575. (2) Industrial vacuum truck rentals are in high demand with no guaranteed availability. This is not the recommended alternative. COMMISSION AGENDA Action Item No. Page of ��Template revised September 22, 2016 ; format updates October 19, Alternative Purchase the vac uum truck. Cost Implications: $625 ,000 capital cost. Total cost of $ 1,000 ,405 over ten years. Pros (1) Life expectancy of the unit is 10 years. (2) Lower total cost than renting the vacuum truck. (3) Rate of return on cost compared to other alternative is less than years. (4) Availability to perform routine maintenance as well as responding to urgent needs. Cons (1) High initial capital cost. (2) Maintenance costs, expected to be approximately $32 ,000 per year with NPV of $258,673 (figured into the total cost of ownership) This is the recommended alternative. FINANCIAL IMPLICATIONS Cost Estimate /Authorization Summary Capital Expense Total COST ESTIMATE Original estimate ,00 625,00 AUTHORIZATION Previous authorizations Current request for authorization ,00 $625,00 Total authorizations, including this request ,00 $625,00 Remaining amount to be authorized Annual Budget Status and Source of Funds The vac uum truck asset procurement was included in the 2017 plan of finance under CIP #C800897 in the amount of $490,000 The remaining $135,000 will be funded by deferred costs to CIP #C800991, Stormwater System Renewal, resulting in no net change to the capital budget. This project will be funded by the Marine Stormwater Utility capital fund. Financial Analysis and Summary Project cost for analysis ,000 Business Unit (BU) Marine Storm ater Utility Effect on business performance (NOI after depreciation) This project will incr ease depreciation expense by 00 per year. IRR/NPV (if relevant) The NPV of this purchase is the present value of the truck cost and annual maintenance costs. CPE Impact COMMISSION AGENDA Action Item No. Page of ��Template revised September 22, 2016 ; format updates October 19, Future Revenues and Expenses ( Total cost of ownership No future revenues are anticipated as a result of the purchase of this equipment. The expenses for maintenance are estimated to be $32 ,000 in 2018 with 3.5% inflation rate thereafter ADDITIONAL BACKGROUND On November 24, 2014, the Port adopted Resolution No. 3696 allowing the Port to establish a Port Stormwater Utility and adopting a Stormwater Utility charter. Services and obligations in the Port of Seattle Stormwater Utility Charter reads “The Utility shall provide services, facilities, systems, and programs for surface water and Stormwater management and pollution control to customers within the service area as set forth in this Charter. ATTACHMENTS TO THIS REQUEST None PREVIOUS COMMISSION ACTIONS OR BRIEFINGS None